A state-owned enterprise, the Mafikeng Industrial Development Zone (MIDZ), once mooted as an industrialisation solution and economic booster for the province, has been dissolved.

The failure of the industrial development zone was confirmed at the weekend following a review by the provincial government of state-owned enterprises in the North West.

Established in 2000, the development zone was said to have the potential to industrialise the North West, starting in Mafikeng with a staggering R7bn turnover, once the entity was operational.

However, it got off to a rocky start and has for the past several years been dormant despite having millions of rands pumped into its coffers. But it turned into a white elephant.

Provincial government spokesperson Lesiba Kgwele said: “The decisive resolve to wind down the development zone was taken because the organisation was technically insolvent as its liabilities had exceeded its assets.”

He pointed out that an administrator had been appointed and former MIDZ CEO Tebogo Kebotlhale’s contract had recently been terminated.

“After the appointment of a caretaker administrator on January 18, the contract of its former CEO, who had been on suspension from April 2011, was terminated on February 29.

“The provincial government had noted that besides the completion of the first phase of the development amounting to R126m, the entity has not achieved any of its strategic intents,” Kgwele said.

He added that as part of the winding down process, assets belonging to the zone, irregular payments, verification of past salary adjustments and overpayments to staff are to be recovered.

“Staff matters are to be dealt with in accordance with the provisions of the Labour Relations Act,” he said.

The entity was intended to design, build, operate and manage a world-class industrial development zone from the Mafikeng Airport.

It was supposed to establish viable investment opportunities and recruit potential public and private investors, but the entity failed.

For instance, a bio-diesel project started on the outskirts of Mafikeng was a huge flop as the jatropha plants never left the nursery and the site currently resembles a wasteland.

In her provincial budget speech last month, finance MEC Louisa Mabe cut funding to the entity.

She said: “Funding for Mafikeng Industrial Development Zone has been withdrawn and reallocated to other provincial priorities. MIDZ has not assisted government as expected but also failed to account on the allocated budget for many years.”

Democratic Alliance provincial leader Chris Hattingh said the MIDZ was a waste from its inception.

“The entity should never have been started and should have been closed at least six years ago. It received millions for nothing and has only succeeded in downgrading a Grade 7 airport to Grade 1 standards, making it equal to a farm airstrip,” he said.